Buying and selling stocks can seem very easy to a novice investor, but this is not the case. It’s not only about selling at the highest price and buying at the lowest price; and if you look at things with this approach, then, you are heading for an early exit. If you want to earn huge profits then you need to be well educated about the market, its trends, the stocks, their returns and risks and everything that is related to stocks. You need to research and analyze properly and know how stock prices fluctuate. Here are a few tips that will help you buy and sell stocks:
· First, and foremost, you need to be familiar with the stock market. You should decide in which market you would be investing and then study the trends of that market. Do an extensive research, and study how the stock market works before you dump in all your savings into the stock market.
· After studying the market, the next thing you need to do is to decide on the stocks that you would be investing in. Do not select all risky stocks because then you would not be able to diversify the stock specific risk. Try and buy stocks that are different in terms of their risks which mean they are negatively correlated i.e. when the price of one goes down, the price of the other stock goes up. This way your money will not be vulnerable to stock market risks.
· After deciding on which company you will be investing in, make sure that you analyze it. You can do so by going through the company’s financial statements and seeing how much the company has been paying as dividends. Also, one important measure is the price to earnings measure that will help you to determine whether you should be buying stocks from that company or not.
· Next, you need to clarify your investment goals. If you need money one year down the road then you should invest in risky stocks to get a higher return. Or, if you plan to invest for about 2-3 years, then, select stocks that have low risk but pay a good return. Old people who are retired should invest in stocks that are not risky at all, but will provide them with capital appreciation which will act as their monthly income.
· You should also seek some professional help and look out for some brokerage houses that will guide you in investing your money in the right stocks. They will help you earn a substantial return on your investment and there will be fewer chances for you to incur loss.
Following these tips will help you to buy and sell stocks easily. You will be able to make a calculated move and earn big profits. All you need to do is make sure that your stocks are well diversified so you earn even if some of your stocks are incurring losses. Hope you make a good profit!